United Airlines shares fall 3.4% after US FAA increases oversight

FILE PHOTO: Passengers try to rebook their tickets from cancelled United Airlines flights in San Juan·Reuters
David Shepardson and Allison Lampert
Updated 2 min read
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By David Shepardson and Allison Lampert

WASHINGTON (Reuters) -Shares of United Airlines closed down 3.4% on Monday after the U.S. Federal Aviation Administration (FAA) said over the weekend it was increasing its oversight of the carrier following a series of recent safety incidents.

On Saturday, the FAA said it would initiate a formal evaluation to ensure the Chicago-based airline was complying with safety regulations and said the FAA may delay future United certification projects "based on findings from oversight."

Reuters reported Saturday the FAA could potentially not approve allowing customers on United's new planes or new routes. The FAA and United declined to comment.

The formal evaluation, the Air Line Pilots Association (ALPA) the union representing United pilots said Monday, is an type of audit that U.S. carriers undergo every few years and United most recently had one in 2018.

"This is an opportunity to identify the opportunities for improvement within our operation, identify changes to mitigate operational risk, and poise our airline for success by managing those changes effectively," ALPA said Monday.

ALPA said it is unclear if the FAA will pause any United certification activities. "What we do know is that Boeing delivery delays could have an impact, just as any softening of the economy or any temporary pause in certification activities," ALPA said.

United has experienced several safety incidents in the past two weeks.

On March 15, an external panel was found missing from a United aircraft when it landed in Oregon, prompting an FAA investigation.

Before that incident, a United Airlines-operated Boeing 737 MAX rolled onto the grass in Houston. A United-operated Boeing 777-200 bound for Japan also lost a tire after takeoff from San Francisco and was diverted to Los Angeles, where it landed safely.

United said Friday that over the next several weeks employees will see more of a presence by the FAA "in our operation as they begin to review some of our work processes, manuals and facilities."

Earlier this month, United also said that its Boeing deliveries were going to be "way behind this year," adding that it was "impossible to say when MAX 10 is going to get certified."

(Reporting by David Shepardson in Washington, Allison Lampert in Montreal and Nathan Gomes in Bengaluru; Editing by Tasim Zahid and Maju Samuel and Aurora Ellis)

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